My Notes: My Warren Buffett Bible by Robert L. Bloch

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My Notes:

Most of Warren’s success is due to his personality, character, and willingness to learn from and teach others.

Of his many outstanding qualities, the role as teacher is the one for which, Warren states, he would most like to be remembered.

“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”

Therefore a proven discipline is an essential element in becoming a successful investor.

The ultimate act of generosity is Warren Buffett sharing his genius with the individual investor!

Note: I am honored that Warren Buffett has given me written permission to use his inspiring words in this volume.

Risk comes from not knowing what you are doing.

It is more important to say “no” to an opportunity, than say “yes.”

Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway.

Rule No. 1: Never lose money.

Rule No. 2: Don’t forget No. 1.

People continue to do foolish things no matter what the regulation is, and they always will.

A great investment opportunity occurs when a marvelous business encounters a one-time huge, but solvable problem.

Overall, we’ve done better by avoiding dragons than by slaying them.

Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.

I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.

Long ago, Ben Graham taught me that “price is what you pay; value is what you get.” Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.

I don’t invest a dime based on macro forecasts.

When investing, pessimism is your friend, euphoria the enemy.

The ability to say “no” is a tremendous advantage for an investor.

If a business does well, the stock eventually follows.

Never invest in a business you can’t understand.

You should invest in a business that even a fool can run, because someday a fool will.

Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.

There are 309 million people out there that are trying to improve their lot in life. And we’ve got a system that allows them to do it.

The definition of a great company is one that will be great for 25 or 30 years.

Success in investing doesn’t correlate with IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people in trouble investing.

Periodically, financial markets will become divorced from reality.

I tell everybody who works for our company to do only two things to be successful. They are: 
1) think like an owner, and 
2) tell us bad news right away. 
There is no reason to worry about good news.

Inactivity strikes us as intelligent behavior.

We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen.

What the wise do in the beginning, fools do in the end.

You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.

I am not a businessman, I am an artist.

No business has ever failed with happy customers. You are selling happiness.

In stock markets it’s an auction market, and crazy things can happen.

When people get fearful, they get fearful enmasse. Confidence comes back one at a time. When they get greedy, they get greedy enmasse.

You can’t make a good deal with a bad person.

If you’re in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.

There are some parts of the game that we don’t understand, so we don’t play with them.

The best thing that happens to us is when a great company gets into temporary trouble . . . We want to buy them when they’re on the operating table.

In our view, though, investment students need only two well-taught courses—How to Value a Business, and How to Think About Market Prices.

We enjoy the process far more than the proceeds.

When we invest in stocks, we invest in businesses.

Valuing a business is part art and part science.

When you’re associating with the people that you love, doing what you love, it doesn’t get any better than that.

Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.

You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with a 130 IQ. Rationality is essential.

Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.

Draw a circle around the businesses you understand and then eliminate those that fail to qualify on the basis of value, good management, and limited exposure to hard times.

I read annual reports of the company I’m looking at, and I read the annual reports of the competitors—that is the main source of material.

All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.

Problems in a company are like cockroaches in the kitchen. You will never find just one.

I always picture myself as owning the whole place. And if management is following the same policy that I would follow if I owned the whole place, that’s a management I like.

Buy a business, don’t rent stocks.

Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.

Losing some money is an inevitable part of investing and there is nothing you can do to prevent it.

Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not invest in the stock market.

I believe in getting things done through other people.

The world will seek low-cost production as long as the quality is there.